Law Lets IRS Seize Accounts On Suspicion, No Crime Required 424
schwit1 writes: The IRS admits to seizing hundreds of thousands of dollars of private assets, without any proof of illegal activity, merely because there is a law that lets them do it. From the article: "Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up and settle the case for a portion of their money.
'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. 'They're middle-class citizens who have never had any trouble with the law.'" The article describes several specific cases, all of which are beyond egregious and are in fact entirely unconstitutional. The Bill of Rights is very clear about this: The federal government cannot take private property without just compensation."
'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. 'They're middle-class citizens who have never had any trouble with the law.'" The article describes several specific cases, all of which are beyond egregious and are in fact entirely unconstitutional. The Bill of Rights is very clear about this: The federal government cannot take private property without just compensation."
Time for a revolution (Score:2, Insightful)
It's time for the people to take back the world. The massive bureaucracy with its bloated laws and indifferent employees have got to shrink!
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I agree. Close your bank accounts, use check cashing services and pay everything with cash or money orders.
Done by enough people, loudly enough, would be incentive to get stodgy steak-fed Congress-clowns to fix their blunder.
Likely? No. But , I can see there will be outcry if they abuse this law publicly enough. More stupid bullshit from the "superior" overlords we elected. Wait! You elected them! I didn't vote for any Repubmocrats! You did!
You Goddamn fix it! You made the mess, now clean it up! And quit vo
Yeah - nothing bad happens when a cop finds cash. (Score:5, Informative)
https://www.youtube.com/watch?... [youtube.com]
Last Week Tonight with John Oliver: Civil Forfeiture (HBO)
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Whoa, that's messed up!
Re:Yeah - nothing bad happens when a cop finds cas (Score:5, Informative)
Oh, wait. [huffingtonpost.com]
Thinking of cops as anything but thugs that view everyone else as the enemy, who they can lie to, kidnap, steal from, and beat/tase/mace with total impunity, is naivete now reserved only for the people who have not yet been unfortunate enough to catch a cops eye (which doesn't require doing anything illegal). These people think that not all cops are bad simply because they see them not abusing someone, and the fact that many targets of the police are criminals who need to be removed from society. That doesn't excuse the fact that any cop who doesn't, at least sometimes, violate peoples rights (the friendly cop who helped you out probably also civilly forfeited his department a new margarita machine/zamboni/trip to disney-all real, btw [buzzfeed.com]), is at a minimum covering for his buddies that do. The entire system is rotten to the core: there are no good cops, only cops that are less pure evil and closer to how cops should act (that is, they occasionally arrest someone who deserves it without violating their rights).
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Not a good idea either, since the cops can seize the cash. So between the cops and the IRS, you need to resort to barter. Better carry your assets in the form of stainless steel nails that can be weighed by the pound.
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Re: Time for a revolution (Score:4, Interesting)
Re:Time for a revolution (Score:5, Interesting)
So if you deposit $10,000 in a bank, it causes (you and) the bank to file paperwork that you deposited $10,000 - this is called triggering.
Triggering: A 1970 anti-money-laundering law known as the Bank Secrecy Act spells out the rules for large cash withdrawals. In general, banks must report any transaction involving at least $10,000 in cash. That includes not only withdrawals but also deposits, currency exchanges (such as swapping dollars for euros or Japanese yen) and the purchase of traveler's checks.
So in this case, if you deposit slightly less than $10,000 then that also triggers the bank to privately report you to the government. All of the people mentioned in the article deposited slightly less than the $10,000 to avoid triggering, and they knowingly avoided it, although for different reasons (some did it because they thought it was a hassle for the bank, and they were trying to be nice?). So if you need to deposit $10,000+ in an account, then fucking do it! In this case, it "triggers" an event, but that event doesn't remove your money.
Re:Time for a revolution (Score:5, Informative)
So in this case, if you deposit slightly less than $10,000 then that also triggers the bank to privately report you to the government. All of the people mentioned in the article deposited slightly less than the $10,000 to avoid triggering, and they knowingly avoided it, although for different reasons (some did it because they thought it was a hassle for the bank, and they were trying to be nice?). So if you need to deposit $10,000+ in an account, then fucking do it! In this case, it "triggers" an event, but that event doesn't remove your money.
At least one had an entirely different reason - they were banking their cash before it reached $10,000 each time because their insurance policy had a $10,000 limit on claims for cash. Another was described as depositing wildly varying amounts at regular intervals, apparently just banking their business's weekly takings (or whatever) that just happened to always be between $5k and $10k.
Yes, there were a couple of cases where the avoidance of the limit sounded to be intentional, but that wasn't the case in all of the instances presented in the article.
Re:Time for a revolution (Score:5, Interesting)
Let me guess, in 1970 when they passed this law they did not index the amount to inflation?
Inflation since 1970 means that in 2014 the amount triggering the law is about 84% lower than it was in 1970, and that in another 100 years your kids' weekly allowance will trigger the law. Given the inability of Congress to pass anything, I do assume that the law will be unchanged for the next 100 years.
If the $10,000 dollar amount were indexed to inflation then it would be about $61,000 in 2014 dollars.
Re:triggering you don't know what you're talking a (Score:5, Insightful)
Every business is guilty of structuring under these rules.
Yes, that's the beauty of it. Everyone can be stolen from. Right now, it's happening in small increments. If there's a real financial crisis, I can foresee every small business in the USA losing their money on the same day.
Re:Time for a revolution (Score:4, Insightful)
I agree. Close your bank accounts, use check cashing services and pay everything with cash...
Until you get pulled over by a police officer and he confiscates all your cash under the exact same fucked up law.
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Re:Time for a revolution (Score:4, Informative)
No, you pretty much have to have a bank account nowadays, whether it's safe from the government or not. Try keeping your balance as low as possible to minimize the risk.
Ummm... Banks can suck my balls.. I've had my money in a credit union for the last 30 years or so.. They don't fee you to death, getting a loan is a piece of cake, and usually as convienient (or sometimes moreso) as a bank. Not to mention, if you have a problem, which I did, once, with my current credit union, I placed a call to the CEO of the credit union, whose phone number is plainly listed on the CU website.. Problem was solved WHILE I WAS on the phone with him... Try THAT with a bank... I dare ya..
Re: Time for a revolution (Score:5, Insightful)
Re:Time for a revolution (Score:5, Informative)
The revolution already happened - it's called Bitcoin.
I've spent the last year bank-free.
I live in the US, but work for a Swiss software company and get paid the CHF equivalent of $160k/year.
They pay me in Bitcoin.
I have no bank account.
Everything I need to buy I either pay for directly in Bitcoin, or in cash.
When I need cash, I use LocalBitcoins to find somebody who wants to trade.
The "massive bureaucracy with its bloated laws and indifferent employees" can fuck off. They can point their guns at secp256k1 all they want but it won't do them any good.
I just have to laugh at people who still care about or participate in politics - it's a complete waste of time. Within a few years Bitcoin has accomplished the change which many decades of voting have failed to provide.
Re:Time for a revolution (Score:5, Insightful)
What happens when bitcoin crashes? Also as you live in the USA you are subject US taxes. even if it is bitcoin. if you are not paying taxes the IRS can treat you like they treated Al capone.
The IRS
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When the exchange rate goes down, I interpret it as a pay raise.
Right now, my expenses are far lower than my income, so I'm adding to my savings substantially every month.
Over the last few months as the exchange rate has gone down, the result has been that the number of bitcoins I am paid has been going up, therefore the rate at which my savings is accumulating has been increasing.
Intra-month fluctuations don't affect me, because I sell what I need to cover expenses on the
Re:Time for a revolution (Score:4, Informative)
Re:Time for a revolution (Score:5, Informative)
Re:Time for a revolution (Score:4, Interesting)
Sure, you can go to another country. But, you are in the USA. Regardless of your opinion on it, you're responsible for paying (or not) your taxes.
Given what our government does with most of our tax dollars, I'd argue you have a moral obligation to deprive them of as much money as possible. That said, the IRS is the scariest, most lawless 3 letter agency we have. I don't screw with them and I don't recommend you do either.
Re:Time for a revolution (Score:5, Informative)
FYI, the US and Libya are the only two nations that tax their former citizens _after_ they renounce citizenship (for the US, it is 10 yrs. after). You can tell the US to fuck off, but you might find it puts a crimp in your abilty to travel, even with your shiny new non-US passport.
Comment removed (Score:5, Informative)
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Re:Time for a revolution (Score:4, Insightful)
Ah, I see. You've never dealt with the IRS. Here's how it goes: we've taken all your stuff and thrown your ass in jail for criminal evasion - you owe us $80 million for the $100 million you hid in bitcoin. Prove otherwise if you want to pay less.
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Whoa, whoa, slow down. I think you're a little off-base here. Be reasonable!
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While bitcoin remains volatile it is smart to hedge against this volatility holding another form of currency. This way the consumer can actually benefit from the volatility of bitcoin by only spending Bitcoins when the are valued higher than the purchased price or when they were received, otherwise spend your Fiat. In order to do this one must have one to two weeks of spending cash saved; but shouldn't everyone encourage this behavior anyways instead of living paycheck to paycheck?
Some companies and indi
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if you are not paying taxes the IRS can treat you like they treated Al capone.
It certainly will be interesting to see how the IRS and authorities deal with bitcoin in the future. How do they find funds they don't know exist or belong to an individual? How do they access capital gains on assets that are spent, lost or transferred to a wallet not associated with your identity? How do they seize funds that can be made immune to asset forfeiture?
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Come on, don't ruin the surprise!
Let them dig themselves in deeper with their empty threats before revealing that financial cryptographers are already two steps ahead of them.
It's more fun that way.
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So the IRS says "we think you owe us $80 million because bitcoin - prove otherwise". Now what?
Re:Time for a revolution (Score:5, Insightful)
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Sure, you can freeload in your own country & take advantage of the infrastructure that other people pay for. Do you think your approach can scale?
Re:Time for a revolution (Score:4, Informative)
Sure, you can freeload in your own country & take advantage of the infrastructure that other people pay for. Do you think your approach can scale?
You are making two flawed assumptions. The poster never gave an indication as to whether or not he pays taxes, he merely insinuated that he doesn't care about or participate in politics. Secondly, if we assume he is avoiding paying taxes, you cannot automatically posit that he doesn't contribute to the country or infrastructure with the funds saved. Many anarchists are conscientious objectors who will purposely invest money not paid towards funding the military industrial complex or subverting our privacy for non-profit causes instead.
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Piracy and invasion (Score:3, Interesting)
Re:Time for a revolution (Score:5, Informative)
READ THE ARTICLE! They can take the cash and then negotiate with the 'accused', (well - accused isn't the right term since they haven't accused anyone of anything), lets say 'suspissioned' to decide what percentage they are going to give back to keep it from costing the ... lets use the word 'VICTIM' from being bankrupt with legal fees and the futile aspect of fighting the IRS. ...
"First they came for the Tea Party, but I did not speak out because I wasn't a fiscal conservative."
"They they came for
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Hint, neither are they.
Living without Money (Score:5, Insightful)
If they've done nothing wrong, they have nothing to worry about.
I hope you were being sarcastic but it's modded 'insightful' so that's not how people are reading it! Even if you are completely innocent of all wrong doing having your accounts frozen will have a massive impact on your life. Suddenly accessing your paycheque to pay the mortgage/rent, purchase food etc. becomes impossible all you have is you cash on hand for however long it takes them to realize that you are innocent and to pay it back. That will have a massive impact on your life and to be able to do that simply because some overworked policeman has a suspicion seems highly unreasonable. In fact I'm guessing that you'll need to go to court to get the money back and who knows how you'll be paying for the lawyer or whether you can also reclaim the expenses of the court case from the US government.
I'm all for supporting law enforcement but seizing money on a suspicion without any court oversight is just wrong. If they need to act fast then let them freeze an account for 24 hours to give them the time to go to a court and make a case for seizure. This gives them the ability to act rapidly, keeps the system open to public scrutiny and would ensure that they have some evidence before peoples lives are impacted. Why do governments find it so hard to put reasonable balances like this into laws?
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Bad government is bad for all of us.
Re: Time for a revolution (Score:5, Insightful)
Ever seen a big government that wasn't bad? I sure can't think of any.
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Good or well functioning government does not need to be big. I'll jump to the conclusion that government has already started going bad before it got big. There likely is no big government that was not bad.
Re: Time for a revolution (Score:4, Interesting)
I'll jump to the conclusion that government has already started going bad before it got big.
Very true [wikipedia.org]. The ink was hardly dry on that "goddamn piece of paper". In fact there were many warning signs before the thing was drafted. The aristocracy is alive and well...
Re:Time for a revolution (Score:5, Insightful)
> If they've done nothing wrong, they have nothing to worry about.
Are you kidding? The whole point of this is that you can have ALL of your stuff taken without the slightest hint you've done anything wrong. That's the whole point of this "due process" thing. It ensures that there is actually a reason to mess with you.
They can take your stuff and never give it back and they don't even have to try to prosecute you or anything.
You just lose your stuff and have to deal with all of the nice fallout of that.
Chances are, it will be a COMPUTER that spits out an audit request to trigger all nonsense.
Think automated DMCA takedown.
BTW, your attitude is how the really heinous stuff can happen. All of this bogus "it can't happen to me" or "it can only happen to the bad people" enables things like the purges of Stalin and Hitler's various atrocities. (our own japanese internment camps too btw)
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The US government never owned the entire world in the first place.
That attitude is the single biggest reason there are terrorists.
The reason why Islamic terrorists have been attacking India for decades is "because USA"?
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That is the politically correct view on Slashdot, yes.
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Also in Thailand [wikipedia.org] and Nigeria [wikipedia.org]. All USA's fault somehow. Or maybe Israel's. It depends on which groupthink is currently active.
Re:Time for a revolution (Score:4, Informative)
Re: Time for a revolution (Score:2)
Re: Time for hope (Score:5, Interesting)
It is possible this conclusion is wrong, so I will not argue with anyone providing evidence that this was primarily a Democratic Party idea (I can think of several explanations as to why a Republican President would sign a bill into law that he mildly disagreed with, but cannot conclude that any of those are true in this case without doing more work than I am willing to at this time).
Conclusion: This is not a "Republican policy". It is a bipartisan policy and should be unconstitutional (and that the Framers of the Constitution would be horrified that anyone could think that it was not).
Re: Time for hope (Score:5, Insightful)
The differences between our two parties on many important issues around privacy, rule of law, and freedom of speech are mostly negligable. Both parties are pretty pathetic, if not defacto evil.
seizures without criminal charges in 2012 (Score:5, Insightful)
Administrative seizures of money without an associated criminal case began in earnest in 2012. I don't recall, who was running the administration? Perhaps he had more flexibility after he was re-elected.
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The GP refers to the 501(c)(4) scandal last year, not to any particular changes in law.
Looks like the liberals are just waiting for their turn to feel mock indignation about something.
/ More liberal than conservative.
and they use cash businesses as examples (Score:2, Insightful)
it's a bad law and i don't think it should exist but most of the examples in the article are people highly likely to be cheating on their taxes by running a cash only business and under reporting their revenues. they should really just get a safe deposit box and keep the cash in there and mostly use cash in their daily life
Re:and they use cash businesses as examples (Score:5, Insightful)
it's a bad law and i don't think it should exist but most of the examples in the article are people highly likely to be cheating on their taxes by running a cash only business and under reporting their revenues.
Ok.
But there are existing processes to investigate and prosecute tax cheats. Use them.
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What happened to be "innocent until proven guilty"? Nothing wrong with investigating people with hard-to-track business models. But fleecing them just because their business model makes total control harder to do? Not exactly an incentive to be honest when you are going to be fleeced anyway, is it?
Re:and they use cash businesses as examples (Score:5, Informative)
It went out of fashion in the 1990s. Because War On (some) Drugs.
Seriously, people, this civil forfeiture bullshit has been going on since the late 20th century. It's legal roots go back to the 1600s, but it was the U.S. in the 1990s where it started to get egregious.
Are y'all just learning about it? Start with the wik [wikipedia.org] for a decent overview.
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they have to know about the box in the first place. what sets them off in this case is you have people running a small business and depositing thousands of dollars into their bank accounts, but under the $10,000 reporting requirement. and doing it on a regular basis. and if you look at their tax returns they are probably running the business for a small profit.
if you have cash in a safe at home and pay for things in cash, no one will ever know
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not if you have a good accountant who reports losses in the right years and profits small enough to let you live on in others
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the cops will need a search warrant to enter the house. that takes some evidence and can be contested by the worst legal aid lawyers. this is why they are seizing from banks accounts, faster, easier, no warrant, very little legal oversight and the burden of the cost and time of getting money back is on the person who lost the money
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Actually, if they put their cash in a box, local police can seize it, as that much currency is only hoarded for criminal purposes.
They cannot seize a multi-sig Bitcoin wallet either through hacking or by physical invasion. The assets can even be designed to automatically move with a dead mans switch after a certain length of time or moved to a nTimelock where the funds cannot be spent for a certain length of time.
Re: and they use cash businesses as examples (Score:3)
Monkey see, monkey do (Score:5, Insightful)
Re: Monkey see, monkey do (Score:3)
ummmm the constitution trumps laws (Score:4, Interesting)
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Re:ummmm the constitution trumps laws (Score:5, Insightful)
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The consitituion does not require proof, only process.
Re:ummmm the constitution trumps laws (Score:5, Informative)
I agree with you 100%, but the history of civil asset forfeiture would seem to indicate the courts beg to differ.
One of President Paul's first priorities... (Score:4, Funny)
...Is going to have to be to drive a silver stake through the whole civil forfeiture beast.
Re:One of President Paul's first priorities... (Score:4, Insightful)
Re: One of President Paul's first priorities... (Score:2)
It was only a matter of time (Score:4, Insightful)
Since legalized theft through Civil Forfeiture pumps billions of dollars every year into the coffers of police departments throughout the country, the IRS simply wants their piece of the pie as well.
Comment removed (Score:5, Funny)
How this is even considered legal (Score:5, Insightful)
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Asset forfeiture law has been violating the Constitutional rights of suspected drug dealers since the 80s. The public seems to enjoy this phenomenon, especially since many of the non-cash assets are sold at a fraction of their market value at auction by the police departments that perform the seizures. Apparently we Americans don't mind running roughshod over the rights of drug traffickers, but if you try to wipe out some Mexican restaurant owner that *might* be a tax cheat, well then we have a problem wi
Re:How this is even considered legal (Score:5, Insightful)
When they seized the assets of the drug users, I did not speak out because I was not a drug user.
When they seized boats from boat owners, I did not speak out because I was not a boat owner.
etc...
It was a violation of the Constitution in the 1980s when boat owners were complaining about losing their boats because (unbeknownst to them) a passenger had a joint in their pocket. But the public was more interested in hearing that a pothead had been caught and punished, before turning the channel so they could watch the season finale of Dallas. As with all things, government expands until it feels pushback from the public, and we're only just getting to that point.
It is an object lesson on why laws must be judged based on the principles they follow, not on the type of people that are being targeted. Why before they're convincted we should treat terrorist suspects as if they're innocent.
Seems to me (Score:3)
..at least from the article it seems to me that the victims in this case are entirely innocent.
It seems entirely unjust, and obviously so.
I'd say it's a perfect case where someone would go to their congressman or senator and start getting some crap stirred up.
Highway robbery, 21st Century style. (Score:2, Insightful)
On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”
Oh, well, that's okay then, liberty and justice for all. Nothing to see here. "Move along. I said, move the !@#$ along!"
Thank goodness the system is self-correcting. All you need to do is catch the !@#$sucking, mother!@#$ing sons of whores doing it, and they'll stop. Simple. Hoorah! USA!1!
Why did it take a MSM article for them to think of whether it was acquired illegally or that they had justification? When do we get our Magna Carta?
Oh boy ... (Score:5, Insightful)
Then we come over all indignant when that law (which is "on the books") is used outside its originally intended area of application.
Am I the only one who thinks that Congress is to blame here (for passing sloppy legislation), not the IRS or The Government?
Might it not be a good idea to work harder to phrase legislation in such a way that it's difficult to abuse? Or would that cramp the style of "tough-on-crime" politicians?
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Am I the only one who thinks that Congress is to blame here (for passing sloppy legislation), not the IRS or The Government?
Allowing an action, mandating an action, and performing an action are all separate things. Congress didn't mandate this action (for which the IRS could be viewed as ethically blameless as long as they sought ways to mitigate damage). According to the summary, the action was allowed, so while not legally culpable, the IRS can be blamed for poor ethics by choosing to exercise power in this fashion. Congress is to blame for one thing (allowing this activity), and IRS the other (choosing to engage in this
Agreed (Score:2)
My comment was posted before I'd thought things through. The Slashdot virus must have infected me.
Re: Oh boy ... (Score:3)
I blame people who say idiotic things like "if you've got nothing to hide you've got nothing to worry about".
Re:Oh boy ... (Score:5, Insightful)
Two branches. The courts didn't have to uphold this ridiculous concept, but the executive branch also had the power to say "this isn't right" and refuse to prosecute.
But for all that, Congress is the legislative body, and has responsibility for defining the laws of the USA. That's its principal constitutional purpose. You can blame other parts of the federal government somewhat, but blaming Congress for bad laws is always precisely the right thing to do.
Seomething seems odd about this... (Score:2)
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Because fighting in court demands money: the one they just took out from you.
Re: Seomething seems odd about this... (Score:2)
Because it's very expensive.
Re:Seomething seems odd about this... (Score:4, Insightful)
Because the Supreme Court has already ruled [wikipedia.org] that it's not unconstitutional. I personally disagree with their opinion, but that's how the law is interpreted at present. You can prove you're an innocent owner, but there's legally absolutely nothing to keep the government from taking the property anyway.
It's disturbing, because when there aren't any legal avenues available to address this kind of theft, eventually people with nothing left to lose will start to work outside the legal system for redress.
Rotten (Score:5, Insightful)
This seizure of assets stuff is one of the biggest scandals that isn't being widely discussed in the media. It's happening with organizations with police powers at every level in the US, from local sheriff's to municipal police right on up to Federal police agencies like the IRS.
The most insidious part of the story is that it is really nothing more than a tool of upward redistribution of wealth - upward. Like most things in government since at least 1980, the government is all about redistributing wealth upwards.
By far, asset seizure is being used more often against people in the lower half of the socio-economic scale. In Chicago, I see it every day with cars being booted for non-payment of parking tickets, and it's accelerated since the cost of street parking went up 20-40x over the course of three years.
Maybe we need to vote in a 3rd party? (Score:3)
Repubs, and dems, don't give a crap. They are both owned by corporations. Congress has, something like, a 10% approval rating, and a 90% retention rate.
Throw the bums out, vote 3rd party. It is the only way we will ever have real change.
Re: Maybe we need to vote in a 3rd party? (Score:3)
That's a nice idea, but the majority has been brainwashed into believing that any vote that's not D or R is "wasted". Ridiculous, but that's what happened.
Sadly, even the 3rd parties don't give some of us much to work with. I generally like Libertarian ideals, but the reality is that if they got everything they want we would end up with a government by and for the corporations. Which is basically what we have now, other than that they wouldn't bother to try to hide it. Greens would do basically the same, bu
He's avoiding the point (Score:4, Insightful)
Quote: "'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor "
Ummm, hey Mr. Lawer Dude: why should they be allowed to impound ANY non-criminal item from ANYONE? It's one thing to remove, say, guns and illegal drugs when arriving with a warrant. It's another to say "hey, I bet that cash and those guns are illegal so let's take them " (and the car they're in -- the car is often taken as well) It's been pretty well established that local police depts use the forfeiture laws as a moneymaking operation. How about we take property the old-fashioned (joke) way: after conviction, or at the very least, grand-jury indictment?
Re: Still trust big government? (Score:2)
Depends. If you're happy that nothing bad will ever happen to you then carry on believing in Libertaria. Me I'll rely on the fact that I will get treatment when I'm sick and won't starve if I am no longer able to work through no fault of my own.
You might argue that the private sector can do that but you have to justify yourself to them much more than to a state health care system.
Fight the bad laws and the bad actors for sure but the reason that you and I are amongst the safest humans in history is largely
Re:Not a Fifth AMendment issue (Score:5, Informative)
It's a Fifth Amendment issue, but I think it's more to do with the bolded text.
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Police stop you, and take all of your money, because they think you were going to use the money for drugs.
IMO in many cases they probably don't think the money is going to be used for drugs, but they want the money for a new margarita machine and so they have to claim that they believe the money is drug money to create the legal basis to take the money from you. That is, the cops will say it's drug money even when they don't really think that, but they just really, really want the money.